Friday, March 24th, 2017

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Demystifying the Real Estate Auction in 19 Minutes

So it all started with an alluring email…

“Ok, help me out here guys. Looking for your input….

Auction.com just called me to confirm that I got the accepted offer.  However, they are different from REDC.com where the bid is the bid and you win.

With auction.com the seller has the right to say yes or no within 1-2 weeks. What they want me to do is sign the OTP that they are sending to me and wire them the full amount of 23K. I have 24 hours to complete this. If the seller says yes then it’s a done deal and we proceed.

If the seller says no, then they refund me the money in whole or the seller can counter offer me. This is written in the terms of the agreement…..you know…..the same one that we never read, just check the box, and make the offer 🙂

So……with that said…..how would you guys proceed? Tell them to take a hike? Would you trust them? etc etc.”

Nate

Steve Cavanaugh

Now just so you know, this email came to me within our little Flip VIPs mastermind group I’m lucky enough to be a part of.  We email each other privately with deal related questions like this and whatnot.

What followed was a revealing email banter with another of our colleagues – fix-and-flip guy Steve Cavanaugh (LaPleda, MD) – who turns out to be somewhat of an underground expert in the real estate auction arena – both online and off.

Call me intrigued.  I’ve done somewhere close to a couple hundred deals, but I’ve never bought one via auction. So I asked Steve if I could call him on the phone for a few  and grill him with whatever the heck questions that come to mind.

4 things that happened next…

  1. He said yes.
  2. It was awesome.
  3. I recorded it.
  4. And posted it for you here 😉

Listen and enjoy…

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The whole shebang’s only around 19 minutes or so, and well worth eavesdropping in on if you’re even remotely interested in gleaning a few choice, firsthand insights into buying real estate via online or offline auctions.

Questions and stuff we talked about…

  • Online vs. offline vs. “simulcast” auctions
  • How the auction process basically works from the investor’s perspective
  • How much liquid capital should you have on hand before bidding?
  • How much opportunity do you feel there is in online real estate auctions right now?
  • How do you get the best results possible from the auction arena?
  • Why you should start out by going in person to the live auctions?
  • One thing you should always do at every single auction you attend to identify the players
  • Where should you sit at live auctions?  (and why it matters)
  • What are the minimum qualifications to bid online?
  • One big advantage to being there live vs. online: bid increments
  • Any favorite auctions of yours? (online and off)
  • What about the “buyer’s premium”?
  • Tell me about any recent auction deal you scored?

And for anyone who’s interested, I, Steve and 10 other folks do open-line Q&A calls each and every month.  And it’s remarkably affordable at only thirty-nine bananas.  I just finished mine up for this month – we had around a dozen folks on the line for about an hour and a half.  Good times.

Here’s a link to that if you want to check it out…

Got comments?  More questions?  Bring it.

Just leave a comment below, and I’ll gladly ee if I can get Steve over to answer ‘em for you.

My best,
…jp

PS – It snowed last night here.  Yep, it rarely happens in Memphis. Pigs must’ve just flown by too.

So I got the girls out and we build snow forts and I coaxed everyone (Kara included) into about a 10 minute snowball fight – YEEEEHAWWWWWW!

So here’s one of the pics we took – Kelsey and I admiring our SNOW FORT OF DOOM.  If you wanna see the rest, I posted ’em for you over on the Crackbook page here…

SNOW FORT OF DOOM!

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About 

JP Moses is a roughly-hewn man-child who first got into REI after reading Rich Dad, Poor Dad back in Y2K and went full time in 2002. He's tinkered in everything from landlording to short sales to rehabs to Realtoring to REOs to notes to owner financing, blah, blah, blah...Till he finally stuck his flag deep into wholesaling and has since flipped somewhere north of a couple hundred deals.

JP's not a “guru” but also doesn't think it's a bad word. Among his core values are authenticity, creativity, big honkin' value, general fun-ness and being unshaven. He's super proud to be chief blogger guy at REItips.com and host of the free REIology podcast. He also thoroughly enjoys sharing his 53 best real estate investing forms with anyone who wants them. You should totally check that out. :-)

  • Nate Andree

    Glad that you guys put this together. Thanks for all the help Steve. I’m now looking for my 3rd online auction property…thanks to you 🙂 Thanks again!

    Nate in Appleton, WI

  • Ken

    Great interview! I have already bought a couple times off an auction, but learned a lot from Steve on this call.

    Ken

  • Russ L

    Great stuff, who new auctions could be so profitable. 🙂

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  • Danngu82

    Hey JP, what do you think about the new foreclosure auction program from nate and chris? I just got it and it stinks. It only cover certain cities and theres no blue print to success. Just a bunch of audio craps. So disappointed.

  • Really? Wow. I honestly haven’t seen the product. I was too busy to do a review before or during the launch. They explained the business model to me and I love it. Bob actually met a guy out on Phoenix who does the exact same thing…bids at auction every day for other investors at $3k a pop. Makes $30k-$50k a month doing it. Not too shabby. But sorry to hear Nate and Chris’s thing disappointed. You gonna return it?

  • Cinidy Civix

    This is the best site about government auctions.

  • Calypsobay

    Thanks for the info. Such a big help. Keep it coming.

  • Beads

    Nice idea of you. Great post.

  • JP, thanks for the interview, good information.  I too work with an investor and I attend live auctions when he’s stretched too thin on time.  We have a good relationship in that, what I help him buy, I list for him when it’s ready to go.  I find standing back to be very helpful too.  The guy I work with won’t get in before they break to speak to the seller either.  Thanks again.

  • You’re welcome, Dale – thanks for commenting!

    …jp

  • Anonymous

    This is awesome on so many levels.  Thanks for sharing the interview!

  • Great piece of info! I’m really pleased to read this whole article. Love these ideas. Thanks for this type of consultation.

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